Delhi meeting results major trade links 
[November 06, 2004]

The Indian Ministry of External Affairs, and the Sri Lanka Ministry of Foreign Affairs issued a joint communiqué at the conclusion of President Chandrika Kumaratunga’s visit to the Indian capital.

Text of the joint communiqué.

President Kumaratunga had discussions with the leaders of 13 corporate entities reflecting a wide range of commercial and industrial activities in India. The participants were the Chairman, Apollo Tyres; Vice Chairman, Bharti Televentures Ltd; Managing Director, Delhi Metro Rail Corporation Ltd.; Chairman, Eicher Group; Chief General Manager, Export Import Bank of India; Secretary General, Federation of Indian Chamber of Commerce and Industry (FICCI); Chairman, Godrej Group; Chairman & Managing Director, Hindustan Construction Co. Ltd.; Joint Managing Director, ICICI Bank; Chairman, Indian Oil Corporation; President, National Association of Software and Service Company (NASSCOM); Chairman, Satyam Computers; and Chairman, Oil and Natural Gas Corporation respectively.

The President was accompanied by Foreign Minister Lakshman Kadirgamar and Power & Energy Minister Susil Premajayantha, in addition to High Commissioner Mangala Moonesinghe, Saliya Wickramasuriya, Chairman, Board of Investment and Jaliya Medagama, Chairman, Ceylon Petroleum Corporation as well as officials from the Ministry of Foreign Affairs and the Presidential Secretariat. The meeting was organized by the High Commission of Sri Lanka in New Delhi.

The President, in a brief statement on the economic and political situation in Sri Lanka, accentuated the desirability of further strengthening the commercial and industrial ties between India and Sri Lanka through the formation of joint ventures and increased foreign direct investment. She explained that the Free Trade Agreement between India and Sri Lanka was proceeding smoothly and the volume of trade between the two countries had increased to the extent of US$ 1.5 billion, thus reversing dramatically the trade imbalance between the two countries, which had prevailed prior to the adoption of the FTA.

Sri Lankan exports to India have increased from US$ 35 million in 1998 to US$ 241 million in 2003. While Indian exports have doubled in that period Sri Lankan exports have increased eight-fold. She said there was a common resolve between the Governments of Sri Lanka and India to inject impetus to the process of further economic integration of the two economies by expediting negotiations on the Comprehensive Economic Partnership Agreement (CEPA) between the two countries.

Against this background each of the participants indicated a strong interest in initiating or further developing ties with Sri Lanka in their respective fields of activity. Many participants made the point that a Sri Lanka/Pakistan Free Trade Agreement would not only enhance economic relations between Sri Lanka and Pakistan but prove beneficial for Indian commerce and industry as such an arrangement would facilitate the establishment of an industrial and manufacturing base of Indian corporate entities in Sri Lanka with a view to their products being exported to Pakistan under the FTA. The President indicated that discussions with regard to an FTA with Pakistan were proceeding and that a successful conclusion was expected shortly.

The Prime Minister of Pakistan is scheduled to visit Sri Lanka shortly. Attention was drawn to the desirability of the Government of India facilitating entry into the Southern States of India for goods manufactured by Indian companies in Sri Lanka as the proximity of those States to Sri Lanka was a considerable attraction to Indian commerce and industry.

The representative of the leading tyre manufacturer in India evinced keen interest in establishing a factory in Sri Lanka at the suggestion of the President.

The Chairman of a leading multi-national IT company, which is one of the eight listed Indian companies on the New York Stock Exchange, with 20 Development Centres across the world indicated that his company wishes to establish a Development Centre in Sri Lanka as well. In December 2004 this company will make a presentation on their plans in Colombo which the President welcomed.

The Chairman of the largest IT association in India said that an important seminar on BPOs (Business Processing and Out-sourcing) units and Call Centres will be held in India shortly and Sri Lanka’s participation was requested. The possibility of establishing such units and centers in Sri Lanka was raised. The President stated that the Government of Sri Lanka would send a delegation to the seminar in order to obtain a report on BPOs and Call Centers, as well as other economically viable sectors in the sphere of information technology.

The Chairman of a group which manufactures vehicles and agricultural products stated that Sri Lanka would be a very competitive venue to establish plants for his company. This idea was encouraged by the President. He emphasized the competitive advantage of exporting goods and services from Sri Lanka to South India via facilities in Sri Lanka.

The question of promoting Indian oil products in Sri Lanka and also the possibility of oil exploration around the coast of Sri Lanka were keenly discussed in detail by two of the largest oil conglomerates in India. The President requested, and it was agreed, that a team be sent to Sri Lanka between November 15 to 20, 2004 to discuss the commercial dynamics and other relevant issues relating to exploration for oil and natural gas.

In the banking sector the second largest bank in India has an application pending for a license to operate in Sri Lanka. This bank is one of the eight Indian companies listed on the New York Stock Exchange. The President welcomed the entry of this Bank to Sri Lanka. The Export Import Bank of India (EXIM Bank) requested facilitation for the establishment of a branch in Sri Lanka which would focus on the SME sector as well as the promotion of trade, value addition and investment. The President welcomed this initiative and stated that high priority is being extended in Sri Lanka to the development of the rural sector.

Dealing with an entirely different field of activity the Secretary General of FICCI stated that the noted films Gladiator and Spiderman were animated in India. The huge Indian film industry was interested in shooting films in Sri Lanka. The development of software games which are gaining immense popularity world-wide in the realm of entertainment could be extended to Sri Lanka. It was suggested that Sri Lanka should play an active role in a forthcoming Film and Radio Entertainment Event in India at which the attractions of Sri Lanka as a venue for the production of Indian films should be displayed. It was pointed out that a large number of Indian films are now being made in Australia, New Zealand, Fiji and Mauritius and there was no reason why Sri Lanka should not be widely used as a film location.

It was also suggested that Sri Lanka should consider establishing branches of the Indian Institute of Technology (IIT) and the Indian Institute of Management (IIM) or similar institutions. The President expressed keen interest in the possibilities of collaboration in the spheres of film production and technology.

Another company expressed its desire to set up a manufacturing plant in Sri Lanka for cordless telephones and also a plant including cold storage facilities specializing in agricultural products such as fruits and vegetables. This company was looking for joint ventures in these areas. The President indicated that the government would facilitate and expedite such projects.

A leading construction company, one of the largest in India dealing with thermal power, nuclear power, hydro power and highways expressed interest in entering into public-private partnership (PPP) projects. The President stated that highway construction projects are a high priority in the development plans of Sri Lanka. She indicated that expressions of interest would soon be invited for the construction of highways between the Airport and Colombo and Colombo and Kandy.

The President also noted the interest of a leading company specializing in the construction of metro railways, which is presently engaged in projects in Bangalore, Calcutta, Chennai, Delhi and Hyderabad, in the upgrading of the existing railway system in Sri Lanka.

At the conclusion of an informative and stimulating discussion the President and all the other participants were of the view that increased commercial and industrial activity in Sri Lanka with the cooperation of Indian companies would undoubtedly become an important and fruitful economic activity in the immediate future. The President indicated her intention of keeping all the initiatives proposed at the meeting under review by her personally.

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Last Updated Date: November 06, 2004